This is a blog that I started in october 2010, mainly for discussing my ideas on the economy, taxation and politics. Please add comments - I'll do my best to reply. If you are new, I would recommend watching one of my YouTube presentations (in French or English). You can download a fully indexed pdf version (over 800 pages) here.

But then I thought that maybe I was being unfair. After all, there is inflation. And it would be normal that the banks increase the money supply to match the devaluation in the value of money caused by inflation. Right?

So, I decided to get the figures on UK Retail Price Index Inflation so that I could see how much net money creation had been going on. This is what I found.

As you can see from the purple curve, which plots the difference between the annual increase in the money supply and the annual increase in the Retail Price Index, the net increase in the money supply has averaged about 7% per year since 1983. There was a big spike at over 15% in 1986 - the year of the Big Bang, when Thatcher's government opened the flood gates and allowed the Banks to do pretty much what they liked. There were low points between between 1991 and 95 and around 2000 when the net increase dropped to only 1-2%. But from 2001 on, the banks were churning out new money more and more every year - reaching a staggering 17.8% at the beginning of 2009.

And then the bubble burst. Since the end of 2010, the money supply has been shrinking at a net rate of 7-8% a year. It's not difficult to imagine why, if you remove 7% of the money in the economy every year, then people will have problems in paying the bills, and that many of the shops in the UKs highstreets are now boarded up. Is it any wonder that the UK economy is stuck?

All this is the direct consequence of leaving money creation (and destuction) in the hands of private banks. We are all supposed to be tightening our belts and getting out of debt - whether we are individuals, companies or governments. But under the current system, when you pay off your debts to the banks, the money simply disappears! It's a no-win situation.

Fortunately, there is a solution. It involves ending the right of commercial banks to create and destroy the money supply, and putting that process in the hands of people who are accountable to the public and whose job is to maintain a stable money supply. It's what Andrew Jackson and Ben Dyson call the "Money Creation Committee". Let's do it.